Report: U.S. losing solar-power production
Many planned U.S. solar factories probably won’t be built as cheap imports from Chinese companies push global cell and panel prices so low that even federal subsidies can’t sustain domestic plants, a report warns.
President Joe Biden has made bringing clean energy manufacturing back to the United States a top priority, both to create jobs and fight climate change. The 2022 Inflation Reduction Act contained a subsidy of 7 cents per watt for domestic solar panel factories that use imported cells, triggering a wave of U.S. plant announcements.
The subsidies, however, will not guarantee U.S. factories make a profit because domestic prices for panels are expected to plunge — from about 23 cents per watt this year to 16 cents per watt by the end of 2025, according to a report from BloombergNEF.
“Global price pressures, and especially cheaper and cheaper imports, will result in many U.S. factories facing a pretty rude awakening,” said BNEF analyst Pol Lezcano. “And it will probably lead to a lot of factory cancellations.”
In addition, the plants that open will likely use cells made with Chinese polysilicon because the material costs twice as much when sourced elsewhere, according to the report. The United States has been keen to revive domestic solar manufacturing in part to shift its supply chain from China.
U.S. policy changes and strong trade enforcement are essential to ensure robust solar manufacturing growth amid sustained imports from China-based companies, First Solar Inc. Chief Executive Officer Mark Widmar told the Senate Finance Committee on Tuesday.
“The U.S. solar manufacturing industry remains in a precarious position despite the passage of the IRA,” Widmar said. “The relentlessness of the Chinese subsidization and dumping strategy has caused a significant collapse in cell and module pricing and threatens the viability of many manufacturers.”